Gail gains nearly 4% as board approves bonus share for every 3; Nomura upgrades target price

NEW DELHI: Shares of GAIL ( India) advanced nearly 4 per cent intraday after the company on Wednesday post market hours approved issuance of one bonus share for every three held. State gas utility also approved an interim dividend of 85 per cent to shore up government revenues.

The scrip was trading 2.26 per cent up at Rs 486.55 around 11 am. Shares of the company opened at Rs 480 and touched a high and low of Rs 493.80 and Rs 480, respectively, in trade so far. Benchmark BSE Sensex was trading 245 points, or 0.88 per cent, up at 27,953.28 around the same time.

“The Board of Directors of the company recommended the issuance of one bonus share of Rs 10 for existing three equity shares of Rs 10 each fully paid up, subject to the shareholders approval," GAIL said in a regulatory filing.

Global brokerage house Nomura raised the target price of Gail India shares to Rs 620 from Rs 475 earlier. Nomura further expects that Gail’s earnings to grow 32 per cent in FY 18 and 18 per cent in FY 19.

GAIL said its board also approved issuance of secured /unsecured, redeemable, non-convertible, taxable bonds up to Rs 750 crore with green shoe option up to 100 per cent of issue size aggregating up to Rs 1,500 crore on a private placement basis, in one or more tranches.